The U.S. International Trade Commissions (ITC) report on cases involving allegations of unfair methods of competition and unfair acts involving imported articles under Section 337 of the Tariff Act of 1930 as amended, 19 U.S.C. § 1337. Because most Section 337 investigations involve allegations of infringement of intellectual property rights, the report offers some interesting insights.
The ITC first notes that Section 337 investigations have increased significantly over the past five years and are expected to remain at elevated levels. In response, the agency has opened a new courtroom that is specially equipped to handle the complex cases that account for much of the IP-based Section 337 docket.
The report also highlights that a substantial number of Section 337 investigations involve IP-based matters regarding high tech products. For instance, computer and telecommunications products accounted for about 25 percent of new investigations instituted in calendar year 2011 and about 30 percent of new investigations in 2012. Other consumer electronic products accounted for about 15 percent of new investigations in 2011 and about 20 percent of new investigations in 2012
The ITC report also addresses investigations initiated by non-practicing entities (NPEs). It cites that some commentators have suggested that NPE filings account for the agency’s increased caseload because of the U.S. Supreme Court’s decision in eBay, Inc. v. MercExchange, LLC, which made injunctions more difficult to obtain in district courts. However, the ITC data does not seem to support this suggestion.
According to the ITC, since the eBay decision on May 15, 2006, it instituted 301 investigations through the first quarter of 2013. Of these, Category 1 NPEs, defined as entities that do not manufacture products that practice the asserted patents and whose business model primarily focuses on purchasing and asserting patents, accounted for 33 (or 11 percent). Category 2 NPEs, defined as all other entities that do not manufacture products that practice the asserted patents, accounted for 27 (or 9 percent).
In that same time period, only four NPEs were successful in obtaining exclusion orders: two Category 1 NPEs and two Category 2 NPEs. In each of these four investigations, the involved NPE or its subsidiary developed the technology at issue in the investigation.
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